U.S. Treasury's Increased Long-End Bond Buyback May not be Necessary
Dow Jones
Aug 28
0508 GMT - The U.S. Treasury's decision last week to double long-end bond buybacks to at least $4 billion from $2 billion is an attempt to engineer lower long-dated yields, Impax Asset Management's Ross Pamphilon says, questioning whether it is necessary. "The 30-year reached a 19-year high above 5.30% last week, but a high yield is not the same thing as a broken market, and we do not see a liquidity problem that warrants intervention," the fixed income CIO says in a note. "The buybacks are also a drop in the ocean relative to $40 trillion of total public debt," he says, adding that the buybacks don't create duration buyers and may prove to be temporary band-aids.
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